Senior coach John Northey began pre-season with a five day camp at HMAS Cerberus in Crib Point, but the Demons' start to the year was interrupted by the Cricket World Cup which kept them off the MCG until Round 2, and district cricket finals at the Junction Oval that forced them into a third choice training ground in a St Kilda park. Recovering stars Garry Lyon and Jim Stynes were forbidden from training because it was feared they would injure themselves again on a pothole.

Their inability to use the Junction Oval was especially galling considering it had been reported that the club were considering developing the ground as a training and social club base. Their pre-season had been poor in most ways, losing four of five practice matches and their first round Fosters Cup game, but after a Round 1 bye the Demons thumped Geelong in Round 2.

In August the Sunday Herald-Sun reported that Melbourne and Richmond officials had been engaged in high level talks regarding a merger. Both clubs denied the story. Former player Gerard Healy was forced to retract the story and issue an apology following the involvement of Richmond's solicitors. In December the Demons would also deny that they were involved in talks with Fitzroy about a merger.

Despite eventually winning seven games the Demons were six and a half wins out of the top six, and after five straight years of finals John Northey resigned as coach to sign with Richmond the same day. Melbourne had announced that Northey's job was under review, and at the same time Allan Jeans was retiring at the Tigers, so when he was offered the certainty of a guaranteed job in 1993 he took it. It was revealed that Melbourne officials were going to compile a shortlist, including Northey, and vote on it to decide who would coach the side in '93.

The club lost $463,188 for the season, but in December they rejected any suggestion of a merger with the even more financially strapped Fitzroy. President Ian Ridley said: "The Melbourne Football Club is the oldest football club in Australia and will never compromise and lose its identity."

Melbourne's reserves lost their third straight grand final. With the Under 19's abolished the Reserves took on the name "Victorian State Football League" despite fielding exactly the same sides that it had the year before and still including both Brisbane and Sydney.